Corbyn's former tax advisor calms fears after John McDonnell 'run on the pound' speech

John McDonnell: 'He's saying there’s a run of the pound risk and he’ll plan for it', says leading economics professor

Richard Murphy spoke to Julia Hartley-Brewer about the shadow chancellor's declaration

Wednesday, September 27, 2017

Jeremy Corbyn's former tax advisor has moved to calm fears about the economic impact of a Labour government, after John McDonnell said he was making contingency plans for a run on the pound.

The shadow chancellor received criticism for raising the possibility of a collapse in sterling if Corbyn wins power. But Richard Murphy, author of The Joy of Tax and a man who has been described as the creator of 'Corbynomics', said the criticism has been overblown.

He told Julia Hartley-Brewer that McDonnell was simply being "prudent" by making such plans, adding that any run on the pound would only be temporary.

"Runs on the pound happen very rarely, and the last two have been under Conservative administrations," Murphy said.

"In the short term, it’s highly likely there’s a risk there will be a protest move against the pound, so John McDonnell is quite sensibly saying they’ll put measures in place. 

"Do I think it will last? No I don’t, I’ve always said that. Once the calm is restored, I don’t think there will be any change in the value of the pound or it might go up."

He also said McDonnell's economic blueprint is far less radical than many claim, saying that Labour "isn't seeking to privatise everybody under the sun" and the party's tax rises would be off-set by the boost provided by infrastructure investment.

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